Uber and similar services could be facing caps on the number of licenses for vehicles that can operate ride-hailing services in London and other UK cities under rule changes being recommended to the government.

A working group in the UK’s Department for Transport has published a report urging a number of changes intended to modernize the rules around taxis and private hire vehicles to take account of app-based technology changes which have piled extra pressure on already long outdated rules.

In addition to suggesting that local licensing authorities should have the power to cap vehicle licenses, the report includes a number of other recommendations that could also have an impact on ride-hailing businesses, such as calling for drivers to be able to speak and write English to a standard that would include being able to deal with “emergency and other challenging situations”; and suggesting CCTV should be universally installed in both taxis and PHVs (“subject to strict data protection measures”) — to mitigate safety concerns for passengers and drivers.

The report supports maintaining the current two-tier system, so keeping a distinction between ‘plying for hire’ and ‘prebooking’, although it notes that technological advancement has “blurred the distinction between the two trades” — and so suggests the introduction of a statutory definition of both.

“This definition should include reviewing the use of technology and vehicle ‘clustering’ as well as ensuring taxis retain the sole right to be hailed on streets or at ranks. Government should convene a panel of regulatory experts to explore and draft the definition,” it suggests.

Legislation for national minimum standards for taxi and PHV licensing — for drivers, vehicles and operators — is another recommendation, though with licensing authorities left free to set additional higher standards if they wish.

The report, which has 34 recommendations in all, also floats the idea that how companies treat drivers, in terms of pay and working conditions, should be taken into account by licensing authorities when they are determining whether or not to grant a license.

“The low pay and exploitation of some, but not all, drivers is a source of concern,” the report notes. “Licensing authorities should take into account any evidence of a person or business flouting employment law, and with it the integrity of the National Living Wage, as part of their test of whether that person or business is ‘fit and proper’ to be a PHV or taxi operator.”

“In my view, operators like Uber will need to initiate major improvements in their drivers’ pay and conditions if they are to be deemed ‘fit and proper’,” he said in a response statement. “The company has been put on notice by this report.”

Though the report’s recommendation on this front do not go far enough for some. Also responding in a statement, the IWGB UPHD’s branch chair, James Farrar — who was one of the former Uber drivers who successfully challenged the company at an employment tribunal — criticized the lack of specific minimum wage guarantees for drivers.

“While the report has some good recommendations, it fails to deal with the most pressing issue for minicab drivers — the chronic violation of minimum wage laws by private hire companies such as Uber,” he said. “By proposing to give local authorities the power to cap vehicle licenses rather than driver licenses, the recommendations risk giving more power to large fleet owners like Addison Lee, while putting vulnerable workers in an even more precarious position.

Field added that he would be pushing for additional debate in parliament on the issues raised and to “encourage the government to safeguard drivers’ living standards by putting this report into action”.

“In the meantime, individual licensing authorities have an important part to play by following New York’s lead in using their licensing policies to guarantee living wage rates for drivers,” he also said.

London’s transport regulator, TfL, has been lobbying for licensing authorities to be given the power cap the number of private hire vehicles in circulation for several years, as the popularity of ride-hailing has led to a spike in for-hire car numbers on London’s streets, making it more difficult for TfL to manage knock-on issues such as congestion and air quality (which are policy priorities for London’s current mayor).

And while TfL can’t itself (yet) impose an overall cap on PHV numbers it has proposed and enacted a number of regulatory tweaks, such as English language proficiency tests for drivers — changes that companies such as Uber have typically sought to push back against.

In the UK primary legislation would be required to enable local licensing authorities to be able to cap PHV licenses themselves. But the government is now being urged to do so by the DfT’s own working group, ramping up the pressure for it act — though with the caveat that any such local caps should be subject to “a public interest test” to prove need.

“This can help authorities to solve challenges around congestion, air quality and parking and ensure appropriate provision of taxi and private hire services for passengers, while maintaining drivers’ working conditions,” the report suggests.

Elsewhere, the report recommends additional changes to rules to improve access to wheelchair accessible vehicles; beef up enforcement against those that flout rules; as well as to support disability awareness training for drivers.

The report also calls on the government to urgently review the evidence and case for restricting the number of hours that taxi and PHV drivers can drive on the same safety grounds that restrict hours for bus and lorry drivers.

It also suggests a mandatory national database of all licensed taxi and PHV drivers, vehicles and operators, be established — to support stronger enforcement, generally, across all its recommended rule tweaks.

It’s not yet clear how the government will respond to the report, nor whether it will end up taking forward all or only some of the recommendations.

Although it’s under increased pressure to act to update regulations in this area, with the working group critically flagging ministers’ failure to act following a Law Commission review the government commissioned, back in 2011, writing: “It is deeply regrettable that the Government has not yet responded to the report and draft bill which the Commission subsequently published in 2014. Had the government acted sooner the concerns that led to the formation of this Group may have been avoided.”